Genachowski Says He Recognizes Promise Of Retrans Revenue Stream

Faces pressure from Hill, cable operators to lift nonduplication and syndicated exclusivity rules
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FCC Chairman Julius Genachowski played his cards close to the vest on
the retrans rulemaking Tuesday, though he did remind his audience that he
historically has favored a hands-off approach to those marketplace
negotiations, a policy enthusiastically shared by broadcasters.

In his speech to a National Association of Broadcasters
convention in Las Vegas Tuesday,
the chairman said he had personal experience of the business challenges
broadcasters face--he was an attorney with Barry Diller's USA Broadcasting in a
past life.

He said he appreciated the valuable content broadcasters
have and the desire to grow that second revenue stream of retrans bucks.
"As you've seen over the past year and a half, I've resisted calls for FCC
intervention and, instead, have encouraged private, market-driven agreements
between broadcasters on the one hand, and cable and satellite providers on the
other," he said.

But under pressure from the Hill and cable operators, the
FCC did open a rulemaking and has proposed some changes, including more clearly
defining good faith bargaining, which the FCC is empowered to require, and more
troubling to broadcasters, lift the network nonduplication rules and
syndicated exclusivity rules that prevent cable operators from negotiating with
similarly-situated out-of-market TV stations if unable to strike retrans
deals.

NAB has said getting rid
of those rules could wreak havoc on their business model. The chairman did not
address those specific 'fixes,' but did say that "while a very large
number of retrans deals got done quietly...there were several incidents
that seriously frustrated viewers, including the World Series black-out last
October.  And many have pushed the Commission to intervene, asking
questions like: Given the changes in the marketplace, is it time to update the
statute or the Commission's retransmission consent rules?  And what is the
impact on consumers of retrans fees for "free" broadcast TV?" The
chairman did not answer either of those questions, saying only that " The
proceeding is open, and I look forward to input from all parties."

He did suggest the FCC was looking at whether there were
regulatory barriers that can be reduced or eliminated "to support the
efforts broadcasters are making to reach the audience that's increasingly
relying on broadband-connected computers, smartphones and tablets."

Broadcasters have argued that one way to help them
become more competitive is to loosen newspaper-broadcast cross-ownership rules
and market ownership limits, which they say could boost their financial
fortunes and ability to offer cross-platform and collaborative efforts.

Related

Retrans Rumblings

FCC chairman Genachowski said last week commission may have to modify retransmission consent rules to prevent blackouts